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Tuesday, December 31, 2013

Basic Formulas in online Advertising : eCPM CALCULATION : (Effective cost per mile)

eCPM CALCULATION : (Effective cost per mile)

Effective CPM is the actual CPM that is being applied , If the CPM set is $2 and the eCPM is $1.5 , the net profit is $0.5 . eCPM helps you measure how well your ads are performing.It is calculated by dividing total earnings/total spend by total number of impressions in thousands.

eCPM = ( Total spent / Impressions delivered ) x 1000

Example : An ad size of 728 has delivered 213456 impressions and has also spent some $300 with CPM set as $1.5, what will be the eCPM ?

Using the formula ,

eCPM = ( 300 / 213456 ) x 1000 = $1.40

We can also calculate eCPM using eCPC , but for that we need to know the conversion rate. and than using the formaula as below :

eCPM = eCPC x conversion rate x 1000

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